Monetary Policy and Financial Stability

Kawtar El Karfi and Driss Mentagui

The global financial crisis has led to thoroughly rethinking the linkage between monetary policy and financial stability. It has highlighted the insufficiency of price stability to maintain financial stability, as it has emerged in a context of low and stable inflation. This has shattered the consensus that promoting only price stability is a sufficient condition to achieve price and financial stability simultaneously. These findings favor the further integration and strengthening of the prudential policies and may call for refinements to monetary and prudential policies. In Morocco, authorities have made great efforts to strengthen the financial sector. The central bank's missions have also been strengthened and broadened. In addition to greater prerogatives in defining monetary policy, the central bank contributes to the stability of the national financial system and may also propose to the government any other measure that would help to maintain financial stability.

Volume 12 | 05-Special Issue

Pages: 1453-1459

DOI: 10.5373/JARDCS/V12SP5/20201905